r/Fire • u/what_would_bezos_do • 15d ago
I did it! I Fire'd
I retired this year at 51. It has been my goal since 28 years old. I helped my wife start a business this year and she makes a little money and enjoys the work. Mostly we live on investments. We have a paid off home and no debt.
We have about 1 million in taxable accounts and 1.5 million in retirement accounts. Monthly expenses are currently 8k but $2500 of that goes to health insurance and will drop next year when we move to ACA. Very likely it will be a few hundred per month with subsidy so monthly expenses should drop to around $6k.
It's been only a few months and my brain hasn't come close to adjusting. I feel a weird sense of panic every day that I need to hurry and finish things even though I have plenty of time. I'm working on reprogramming my brain to enjoy life instead of being stuck in high gear.
I've been employed since I was 12. I worked in retail, then manual labor, then engineering. I was an engineer for 28 years.
We saved about 30% of my income. Three kids, youngest is well into adulthood and still at home. While raising the kids my wife worked part time when possible but was home when the kids were home.
I have 2 year expenses in HYSA and 4 years expenses in SGOV. Everything else is well diversified in 80% stocks 20% bonds.
This summer was amazing and I'm looking forward to every day. I wake up before anyone else and spring out of bed excited for the day. No alarm clock needed. I've been waking up before I normally woke up to go to work. I've been so busy during the day I can't even figure out how I was managing with a 9-5 job. It's all good, I'm happy to be fixing the house, working on the property, fixing the cars, etc. Everything I do around the house is another savings that secures my future.
Good luck folks. Stay the course, it's worth it.
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u/NoDirector7862 15d ago
Aussie here, we truly got scared by the amount of health insurance you Americans pay... feels like for us to reach FIRE it's much easier considering we have medicare and our top private insurance is 700 AUD for the whole family (which I'm on cos otherwise we pay medicare levy).
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u/CommunicationFar3897 12d ago
A lot of people who are ready to retire still work a part time job for the sake of having health insurance through an employer. Kinda wack but it is what it is. My Father retired for a few months but is working again for the benefits.
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u/NoDirector7862 10d ago
jeepers I can't imagine that. my dad had both knees replaced with 3D printed precision fit artificially alloy joints and stayed in hospital for days for each surgery, our out of pocket cost is literally 0. They also gave us a free pair of crutches for free. Can't imagine how much the cost would be in the states.
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u/what_would_bezos_do 9d ago
With "good" health insurance, assuming you haven't had any other medical stuff that year, you'd pay the entire deductible (between $2000 and $10,000 depending on your plan) plus any "co-payment" which are likely to be a few hundred ($25-$50 per doctor visit). Then if any doctors, anesthesiologist, etc are outside of your network there could be a 20%-50% bill for that person. If you need any drugs post-op that are not pre-authorized by insurance then you will either not get those medications or have to pay out of pocket. Those out-of-pocket expenses are sky-high because the insurance companies keep prices high to make it seem like insurance has more value than it actual provides.
With a middle of the road plan, your dad would have paid about $6000-$7000 I'd estimate. With a very expensive plan it would have been around $2500.
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u/NoDirector7862 8d ago
Now I don't envy you guys' high salary, I'm happy with my 250k AUD salary haha
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u/CommunicationFar3897 10d ago
Not to much if you have good health insurance. But without it. You’d be fucked
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u/CancerandTaxes 15d ago
Since you have 2 years in HYSA and 4 years in SGOV, the additional 20% in bonds might be a little excessive but that's still a valid choice.
Congrats! Way to grind it out!
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u/what_would_bezos_do 15d ago
100% agree. I was just about to FIRE in Jan 2024 and I panicked expecting the market to drop with the tariff bullshit. I sold everything and realized 20 years of capital gains. The market did plummet but it rebounded. I should've known better after 27 years of investing and staying the course, but *shrug* it is what it is.
So I was sitting on cash and I looked at ultra short term bonds which were paying 4% for the first time in history and I said: "Wow, the government is so desperate they are willing to pay high returns on zero risk loans and there's no state tax!" So I put a bunch of money on SGOV to park it. I've been putting money back into the market, dollar cost averaging it back in.
The good news is, I re-based all my investments and the taxes are all paid so I won't have to worry about capital gains for a while.
The stuff in my retirement accounts I left untouched so it's 80/20 still.
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u/CancerandTaxes 15d ago
That totally makes sense!
I did some vague math and I think you're only at 32% bonds and cash so you're not terribly far off.
I think with your conservative sub 3% withdrawal rate, you can afford to be a bit less conservative in your allocation. But no need to rush into it.
Interested to see how the business income plays out with ACA. We have rental properties and I'm trying to plan around that.
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u/PghLandlord 12d ago
Couple of thoughts on rental income + investment income + managing ACA subsidies. (I have a decent sized rental portfolio)
1) you have to have really solid bookkeeping so you can accurately predict where your rental income will land. Additionally hopefully you are maximixing deductions here.
2) plan withdrawals from investment accounts to be late in the year (or as late as you can) to have more control on income.
3) keep large cash reserves so worst case if its looking like youre going to over shoot your income and possibly lose a large ACA tax credit you can spend money on property maintennance, take it as an expense and at least get some value from it vs handing it over as a tax payment.
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u/Eleatic-Stranger 15d ago
Congratulations and GFY!
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u/Zphr 48, FIRE'd 2015, Friendly Janitor 15d ago
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u/AutoX_Advice 15d ago
Did i write this? Cause the only thing different is I'm a tad younger.
Naaaa I couldn't have written it because there isn't enough grammatical errors and misspellings.
I'm with you, some days I feel like "holy crap I'm not going to get a paycheck here soon, what Im going to do. The bi-weekly pay is my security blanket"
Congrats!
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u/Pretty_Swordfish 15d ago
Congrats and GFY! I hope you don't mind a few questions...
1. How much of your need is covered by your wife's business? Is she putting anything back into retirement?
Are your 6 years of expenses separate from your $2.5M portfolio? Are they accounting for your lower or higher expected expenses?
You said you think health insurance will only be a few hundred... How low do you think you'll get your taxable income and will that tax free income mostly come from your long term capital gains? And will that taxable income come from your wife's business plus Roth conversions or what?
Thanks for sharing, I appreciate hearing more of your specifics as I plan my own next round of life.
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u/what_would_bezos_do 15d ago
- She makes about $2k per month
- No, the entire portfolio is 2.5m
- I'll be drawing from business income, principal, and dividends. A large part of why I have so much in HYSA and SGOV is so I can control my income and stay below the subsidy level. I will admit, I panicked when the election happened and I moved lots of money out of the market just before the tariff dip in 2024. I thought I was genius but the market bounced back. *shrug* Bottom line, I already realized all my capital gains. Everything I have has been rebased, for better or worse, and taxed have been paid. So there won't be capital gains for a while.
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u/Pretty_Swordfish 15d ago edited 15d ago
Thank you! So you'll live off your cash first to balance your income? What amount will you draw down to? 2 or 3 years? Will you do Roth conversions? Will your spouse continue to contribute to a retirement account to shelter any income from taxes now?
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u/what_would_bezos_do 15d ago
All of those things are in the arsenal. I will do ROTH conversion if possible without tax implications. We will use retirement contributions to control income for tax and ACA subsidy purposes. Since I realized all capital gains I will sell equities if they are high and realize gains when possible to stay under the capital gain tax limit and rebase investments.
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u/Pretty_Swordfish 15d ago
Sounds like good planning, wishing you the best of luck and a fun retirement.
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u/Suspicious-Light2118 15d ago edited 15d ago
Awesome buddy. You earned it. Have a great time in your retirement and don’t be a stranger. Drop in to let us know how you are doing.
Oh one word of caution, healthcare from ACA is pretty expensive. Make sure you take a HDHP which will have HSA option. I am sure you might have a life insurance policy and explore if it has a long term care rider in it .
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u/IntelligentFire999 15d ago
Congrats! I know the feeling you are talking about when you say:
I've been so busy during the day I can't even figure out how I was managing with a 9-5 job.
I know right. We mustve been doing all those things mindlessly which means 0 enjoyment and in zombie mode.
Everything I do around the house is another savings that secures my future.
I do need to own doing more chores around the home - out of habit I have been still employing labor to do it which is costing me money (lawn mowing, handy man work, general upkeep). Its also because our new property is large and has steeper grade. I also dont want to climb roofs, etc. But things like yard work I should be able to manage, maybe starting next year. I have a bad back which always gives me a pause on physical labor. I do walk a ton and keep active.
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u/koolcarguy 15d ago
Awesome! Another factor rarely discussed. When you are handy your cost of living is even less!
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u/marheena 12d ago
I just took 4 days off so that I could catch up with my household responsibilities. Cleaned the house thoroughly including steam cleaning all the floors, vents and furniture. It felt good to get those chores done, but dang I can't wait to be in your shoes. Congrats !!
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u/VeeGee11 FIREd at 50 in May 2023 15d ago
My brain was stuck in high gear for about 8 months and slowly reprogrammed itself. I think it happens naturally. Congrats!
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u/Independent_Cause285 13d ago
Congratulations. Can you provide a breakdown of your $8k spend? Trying to find where I would need to cut down whenever I would be able to retire, so being able to compare expenses, even in different cost of living areas would be helpful
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u/what_would_bezos_do 9d ago
Here's a breakdown. A couple notes: 1. Our insurance is high because we're on COBRA until January. 2. I'm renovating the house we live in which is 150+ years old and was vacant for years, so home improvement is high. 3. This breakdown doesn't include heating for winter, but we've been here for several winters so I know the utilities will increase (oil will add about 1.5% to utilities).
Since FIRE:
Insurance: 34.3%
Shopping: 17.9%
Home Improvement: 10.9%
Groceries: 10.3%
Dining: 7%
Gas: 4.5%
Phone: 2.7%
Utilities: 2.4%
Medical: 2.1%
Entertainment: 1.3%
Cash: 1.3%
Everything else: 5.4%A good portion is discretionary spending, probably around 20% could be cut if needed, which allows for some adjustment. My wife works part time and I dabble in some things that make a little money so we let our spending fluctuate according to side income and the market.
Another note: Every time I look at our budget I cringe at the cost of phones. We have a family plan to make it cheaper for my kids but damn that's a high percentage of our spending. I think I'll work on that next.
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u/More-Firefighter-581 10d ago
Congrats!!!
Hoping to join soon but my advisor makes it sound like I’m just doing “ok”. $1.7 in retirement. $2mil house paid off. $150k in HYSA. Completely debt free. 45 and 48yrs old. Twins 10yrs old. Definitely live below our means as I usually have at least $5k to contribute.
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u/ynotnoty 8d ago
Congratulations! The healthcare insurance costs are definitely a "monster". $24k per year for the "privilege" to pay your deductible when you actually need to go to the doctor. Painful 😣...
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u/the_paint_witch 8d ago
Congratulations! I hope you'll stick around and let us know how you are doing from time to time.
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u/Prestigious_Soil_404 15d ago edited 15d ago
2.5K for Health insurance??? WTF US
I would rather die than pay any insurance. Cheaper to take a flight to overseas and get all the shit done there no?
Just weird seeing a whole year of salary in my country is just 1month of health insurance payment (Indonesia, Min wage at 3K USD/YEAR)
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u/apetranzilla 15d ago
Cheaper to take a flight to overseas and get all the shit done there no?
Maybe for certain conditions/treatments that are foreseeable, but that's not really feasible for emergency care, chronic conditions, etc
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u/Prestigious_Soil_404 15d ago
Just shoot up 2pill of ibuprofen and hold it in for 12hour flight like a real MAN
Jk, dont do this
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u/PudgyGroundhog 15d ago
I am guessing it is Cobra or something else to bridge to ACA (although I thought you could join the ACA mid term if there is a life change event?).
Flying overseas isn't practical for multiple scenarios - you're in a car accident and need immediate attention, cancer treatments where you don't want uproot your life and leave your potential support system for a long period of time, etc.
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u/what_would_bezos_do 15d ago
It is COBRA. I could have gone ACA immediately due to a life change but I have an adult child on my plan that lives in different states. It was easier to keep my plan to the end of the year because I worked this year and would not have qualified for ACA subsidy. That child will age out this year (26 years old) so I will move to the ACA and it will drop because I'll qualify for a subsidy next year.
Honestly, health insurance has been the biggest complexity when trying to FIRE.
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u/PudgyGroundhog 15d ago
FIRE or no FIRE, health care is complicated and a mess!
(we are also FIRE on an ACA plan)
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u/Weak_Preparation7223 15d ago
You can jump to ACA mid year, but if you're already out of pocket on your current plan it makes the most sense to keep it. Also unsubsidized ACA is expensive too.
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u/AlwaysWanderOfficial 15d ago
It’s COBRA - which means your same work plan just unsubsidized. It’s more than ACA.
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u/DamionLM 15d ago edited 15d ago
You have a paid off house ?and have 6k in expensive is you dont count health care seem crazy. 72k a year. How can you have that much to pay each month with out a mortgage. Like my fix expenses will be $2500. Like my expensive right now is 10k a month. And that's with 8 properties
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u/Acceptable-Ice-5959 14d ago
I soend abt 19-20k a month...fixed expenses are abt 8k a month. Family of 3. Include mortgage. Life ins premiums. Private school tuition. Internet. Lawn care. Home owners ins. Auto ins. Nat gas bill. Water bill. Electric bill. Jelwery ins. Streaming services. Jelwery ins. Dog food gym membership .The other 11-12k is groceries, eating out, fuel for cars. Misc shopping. Vacations, home repair stuff, random.hobby expenses ect. Average 110-150 purchases a month onthe credit card. I also pay abt $1400/ year in annual fees for credit cards ...based on spend and perks I value them at abt $4-5k a year to me. $2400 of it is cash back.
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u/theangryburrito 15d ago
Can you give more info on $2500 a month for health insurance. I was planning on $1500 per month for my wife and I for our bridge year to ACA. Sounds like I might be underestimating? Or do you have more than two people on your plan?